We Want Proper Regulation To Keep Crooks Out Of The Industry – Robert Dommisse

Robert Dommisse, CEO, Sanlam Pan Africa Life

The Chief Executive Officer, Sanlam Pan Africa Life (SPA Life), Robert Dommisse in this interview with EDET UDOH during the unveiling of Sanlam Nigeria in Lagos, spoke on the company’s mission in Nigeria and what the regulators need to do to stabilize the insurance market. Excerpt.

Tell us, Why are you in Nigeria?

We are here to rebrand the business to Sanlam Nigeria from FBN Insurance.

What is the significance of this rebranding exercise?

The significance is really that we have been in the market for 12 past years with our partner, First Bank of Nigeria. Recently there was a transaction with First Bank, they sold their stake in the business, we had the right to buy and we bought it up. Really we’ve been so trading as FBN Insurance, obviously we cannot continue trading as FBN Insurance without FBN being a shareholder in the business for very long.

So, we made a decision to rebrand the business to Sanlam Nigeria. And it really shows the confidence we have in the business. We are willing to put our brand on the business because we trust the management; we trust the board that we have here. We trust that we can work with all our local partners to have success.

The Nigerian insurance market has been fraught with some challenges of market place mishaviours buoyed by unethical practices, haven known Sanlam to be an organisation of repute with international best practices, how do you intend to cope with the menace?

We have been really following the international best practices here even from the time we had only 35 per cent shareholding in the business to when we acquired 100 per cent, we have always aligned with the First Bank that we should follow international best practice that was in our contract with them. We said we would follow it.

I think that the business will continue pretty much as it is. Yes, even though we might make some twists to new things then, we have moved into the digital world. We are now 12 years old since we started the business and we have to make the business the market relevance here. We have competitors from other industries coming in, serving clients differently, we have to adapt to that.

With First Bank, we’ve really been following this international best practice. How do we tackle the challenges? We believe in the modern way of doing business, we are very strong, we have a very strong management in the business, a very strong hold that understands the local foundation and we, from the Sanlam head office side (Johannesburg), we can assist with technical skills and what the business needs. But the business needs to be run in Nigeria. Our model is not to try to run it from elsewhere.

The other benefits that we have is that we are operating in 32 other countries on the continent and we don’t necessary know what is best for Casablanca or Capetown. We have other businesses in the continent that have seen the challenges that most of our businesses would see, and we learn from each other.

So, we have gotten a formal and informal network between our CEOs in the businesses and they learn from each other and help each other whenever there are challenges.

Another contentious issue is that of low penetration, what would Sanlam do to enhance market penetration from its own perspective?

I think I mentioned during our brief discussion this morning that if you look at the way FBN Life was structured 12 years ago from the start-up to where it is today, we are one of the top two or three players in the market, we have seen a very good run of the business.

And I don’t believe in quick fixes, I believe in the due business fundamentals and methods that you have a very discipline execution. Most insurers have very similar strategies but the difference in the execution. If you go talk to any international insurers, the strategies and what they talk about are very similar. The magic is in the implementation of that. Implementing your plans in discipline way daily, daily makes the difference and eventually when you open your eyes as we are doing today after 12 years, you say wow, we’ve created something amazing. But actually by doing that it’s one step daily.

Microinsurance is believed to be the future of the industry in Nigeria, how is Sanlam preparing to key into this initiative?

I pretty much believe in inclusivity, you must get people into the insurance net. I also believe that one should be able to do it on a profitable bases. That is the only way you can make it sustainable. A lot of people proclaim to be doing microinsurance but do it at loses and have to stop doing the business in a few years time. I don’t believe in that. We have to find the module where we have affordable prices for every person on a profitable bases, so that it could be a sustainable business.

We are trying a number of joint ventures, a number of partnerships and again, I don’t think this could be one of the sustainable ways…but in terms of finding those partners to cooperate with to get people to buy in due ways….

And I do think it’s a very good model but it is an expensive model and it is really for modern market where you really play at the bottom end of the market. You have to find different distribution model to get to the clients and that is going to be the future focus.

Among the two hundred million Nigerians, which I can authoritatively say is the market in Nigeria, which strata of this huge populace is your target?

Normally at this, we look at somebody who can afford the product and must be able to buy. If you look at the type of products that we would be doing with MTN it could probably be a product with, let’s say, a dollar a month.

So that’s the kind of the lowest strata that we could have. Someone out there should be able to afford a dollar per month in terms of income he gets. But we need a very specific model that is very cheap that can reach the people in that strata.

Climate change and cyber insurances have come to stay because of opportunities abound, what are your plans on this class of business?

First, my expertise is on the life insurance side. We have experts here on general insurance.  The climate change divide is more on the general side. We are experimenting with the number of markets. Again, I don’t think there is anyone we are going to drop. We are, definitely, going to play in that area when we get there.
So, we are working with technology partners that can pick out on climate change if it’s a flood, make a monitor by satellite that will pick that there is a flood. We can buy out those type of advance technologies. So it’s definitely things we want to play in but we don’t want to dive into it at this stage.

What is your view about insurance regulation in Nigeria, would you say that the industry is over regulated or under regulated?

As someone in the insurance industry, it’s very seldom that one would say the industry is under regulated because regulation cost money. But what one also wants is proper regulation to keep crooks out of the industry, if I can be that crude.

So, I think the industry in Nigeria is well-regulated and it’s well-regulated. Everywhere we go insurance players makes me happy and on regulation they always say there is too much regulation. But I think, generally, the industry is well-regulated.

If you are given the opportunity to advise the regulators, what would you tell them?

I don’t know what the answer is but, I think one of the problems in the industry is probably too many players. Too many smaller players in the market. So, you probably need like the past 10-15 years ago, you probably need some kind of consolidation.

And then the world is moving towards all kind of new capital regulation, risk based capital regulation. If you are seventeen and the regulators keep up with that, I think that’s probably the bigger challenges to keep up with all the changes in the world, in terms of different capital regime, different accounting and statement reporting systems.

You have just mentioned consolidation, do you intend to acquire some smaller companies within the industry to add up to what you have at Sanlam Nigeria?

I think we are always open to that. We call that bottom acquisition. It’s been our strategies for the last 12, 15 years. If we see we can…. we can go into a specific segment of the market without necessarily having skill on them. So it is general insurance businesses that are mostly smaller than life insurance business. So, definitely we are looking out for acquisition in the next few years.

Are you currently talking to any of them?

At this stage Allianz transaction is on the go. We are really focusing on getting that finalised at this stage, that’s the first step. Once we get done with that we can then look out for acquisition.

That takes me to issue of joint venture between Sanlam and Allianz, can you give us an update?

We have signed the deal and that was already done, I think in March. Now is to get regulatory approvals for the first part of the deal. The first part of the deal is Sanlam work with businesses on the continent into the co-company. And Allianz will put the businesses across the continent into that same company.

Then we have 60per cent shareholdings and Allianz has 40per cent. To do just that, we need regulatory approvals across the continent. It’s about a hundred regulatory approvals that we need to get and that is the process. And that is going to take up to, at least, second or third quarter of next years.

What are we expecting from the joint venture given the fact that Sanlam is already a big brand and the Allianz also a world class brand?

I think it will achieve things differently for the two firms, Sanlam and Allianz. Allianz as you said is very big internationally but on the continent (Africa) is very small.  Apart from business in Egypt which is very sizeable but in the rest of the continent, they are really pretty small.

So, by getting exposure to the continent is through this joint venture. I think this is the primary reason for doing it. Our primary reason for doing it is that we get access to capital, to skills that we don’t have and also for general insurance and reinsurance businesses we get a very good credit rating that we can quote into those businesses.

A lot of multinationals, government agencies require you to have a certain credit rating before you can do certain insurance. We would get top credit rating for our general insurance businesses which is Allianz credit rating which is top notch rating in the world.